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When I discover a reed in this condition I reintroduce the "smile" by forcing a shim between the two blades.  I generally fashion these shims by cutting strips from a business card or other laminated card stock.  Depending on the thickness of the shims, I force two or three down between the blades.  I then soak the reed in order to relieve some of the strain on the blades and to help it reform closer to its original shape.  I put the reed into a pill bottle and allow it to dry for 24 to 48 hours.  I may visit the reed just to ensure that no mold is present. 
Under some circumstances or conditions, or for no apparent reason at all, a chanter reed may simply collapse.  The tips of the blades lose their curve, become straight, and align themselves very close together.  When blown, they produce little or no sound.  This sometimes happens when a reed gets wet and then dries too quickly or when a reed is pinched down too radically.  However it happens, it's money down the drain unless you know what to do.
In order to understand how to fix the reed, it's important to understand how it was made in the first place.  The two blades of the reed are carefully shaped and ready to bind to the copper staple.  Before doing to, the maker soaks the blades to make them pliable.  He binds them together and allows them to dry before finishing the reed.  The result should be a reed with a modest smile that is responsive and free when mouth blown.  Of course, the reed will require breaking-in and further adjustments to deliver optimal sound and performance.
Following this drying period, I remove the shims and inspect the reed.  The blades should be slightly concave.  If the opening is too great, it can easily be pinched down.  With a bit of experimentation your results will become more and more predictable.  You may not be able to save 100% of your unhappy reeds however you'll be surprised just how many can be brought back from the brink!  Good luck and let me know how you make out!
The Bagpipe Place School